Inflation in the UK came out way higher than forecasted and along with weak CPI from the US, GBP rallied above 2.00 and is onwards to the 2.01 figure. Stocks mixed. Watch the BoE minutes at 08:30 GMT.

Overnight News Bullets

• Swiss Adjusted Retail Sales YoY (Feb) out at 4.5% vs. 4.0% expected.
• UK CPI MoM (Mar) out at 0.5% vs. 0.3% expected. YoY at 3.1% vs. 2.8% expected. Core YoY out at 1.9% vs. 1.8% expected.
• German ZEW Econ. Sentiment (Apr) out at 16.5 vs. 10.0 expected.
• German ZEW Current Situation (Apr) out at (Feb) out at 76.9 vs. 69.0 expected.
• E-Z ZEW Econ. Sentiment (Apr) out at 10.7 vs. 8.0 expected.
• E-Z Trade Balance (Feb) out at -0.2B vs. 0.6B expected.
• Canadian Manufacturing Shipments MoM (Feb) out at -0.2% as expected.
• US CPI MoM (Mar) out at 0.6% as expected.
• US CPI Ex Food & Energy MoM (Mar) out at 0.1% vs. 0.2% expected.
• US Housing Starts (Mar) out at 1518K vs. 1495K expected.
• US Building Permits (Mar) out at 1544K vs. 1510K expected.
• US Industrial Production MoM (Mar) out at -0.2% vs. 0.0% expected.
• US Capacity Utilization (Mar) out at 81.4% vs. 81.9% expected.
• US ABC Consumer Confidence out at -5 vs. -7 previously.
• NZ Consumer Prices QoQ (1Q) out at 0.5% vs. 0.6% expected.
• Australian Westpac Consumer Confidence (Apr) out at -0.2% vs. 3.7% previously.
• Japanese Leading Economic Index (Feb F) out at 27.3% as expected.
• Japanese Coincident Index (Feb F) out at 30.0% vs. 15.0% expected.
   

Markets

• FX: GBPUSD broke 2 for the first time since 1981. USD TWI making new lows on the CPI figures.
• Fixed Income: Strong reversal pattern to the upside in Treasuries and Bunds. JGB??™s lower.
• Stocks: Mixed sessions in both Europe and the US. Nikkei is up 0.8%..
• Commodities: Consolidation in precious metals. Crude oil slightly lower.
   

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Today's Highlights:

This and Next Week??™s Highlights:

What's going on?

• US CPI figures were lower than expected and offering some relief at the Fed. Not so with the Bank of England, whose King is writing to FinMin Brown to excuse the high YoY reading. Significant strength in GBPUSD.
• JPY is looking interesting, with AUDJPY struggling to go higher.
• Stocks: Expect some consolidation. We just had a tax deadline in the US, which usually leads to a relatively weaker second half of April.
• Fixed Income going higher, even in Gilts.

FX